...I suppose it would be worth trying...but I have to wonder, after the first few months of gameplay, what is there left to do? After the first year or two, most of my gameplay tends to center around mega construction projects, and I wouldn't want to tackle anything big with only seven dwarves. It takes forever even with no population cap. So if you're not building mega-monoliths out of glass, and you don't need to build rooms and furniture for hundreds of dwarves...what do you do after the first two hours of gameplay? Just sit and wait for goblins to show up?
With so few dwarves you never run out of things to do. There's no reason why you can't undertake large construction projects, they just take longer. The thing I like about this mode, actually, is that you can build something huge and neat, and it doesn't trigger an onslaught of faceless freeloaders.
I've kept the popcap at 7 and kept playing for a while, I'm now down to 5 dwarves (after having risen back to 9) and only one of my original 7 is left. Goblins are terrifying using these settings, it's the first game of DF I've played where goblins were non-trivial. Even with traps and sorely undermanned guard towers they can cause real damage before grinding themselves to death in the hallway of doom. I may be able to buy all the food and drink I need from merchants using goblin socks, but there's still lots to be done.
Also, I still play as though I have large numbers of dwarves, building and furnishing rooms for many times my population. I keep thinking that once I get the fort the way I want it I'll open the floodgates and let in the Soap Makers and Treshers, but the fort is now 7 years old and there's no end in sight.